Authors Guild Warns on S&S e-Book Royalty Proposal

Simon & Schuster out to take money out of the pockets of their writers again.

The Authors Guild has sent out an advisory to its members suggesting that they carefully review a letter from Simon & Schuster that looks to add an amendment to their contracts that will set the standard royalty for e-books at 15% of the catalog retail price for e-books. The Authors Guild alert makes three points about the proposal: members should discuss the amendment with their attorney or agent; warns that, depending on a member’s particular contract with S&S, the amendment may grant S&S rights that otherwise would be retained by the author; and notes that members should be aware that the amendment may affect their ability to obtain a reversion of rights.

The alert further advises that members should “keep your powder dry,” when negotiating e-book royalty rates, suggesting that members try to retain the right to renegotiate e-book royalties. “The Authors Guild expects that the 15% of the retail list price will be the low-water mark for e-book royalties,” the Guild speculated. “As the e-book market develops, authors with clout will doubtlessly insist on a more reasonable share of e-book revenues, and the industry will have to adapt.”

S&S spokesperson Adam Rothberg said the amendment was sent to a "long list" of authors whose books have not yet been adapted to e-books, with most of the letters going directly to agents. He said the overall goal is to sell more e-books in a rapidly growing market, "and we want to work with our agents and author friends to do that." But that in order to move forward, S&S believes it is important to determine what the royalty rate should be, Rothberg added. Noting that it is still "early days" in the e-book industry, Rothberg said S&S remains willing to talk to authors and agents about any questions they have about the e-book market.

This is the second time the Guild has challenged a proposed change in contract language by S&S. Last year, the organization protested the publisher’s plan to alter the conditions for when authors could get back their rights. The two sides eventually worked out a compromise.

by Jim Milliot w/ PW 07/18/08

07/20/08
12:40 am